Following India's decision to levy heavy export duties on its
iron ore exports, China's second largest iron ore importer
Sinosteel Corporation has halted all imports from one of its major
trade partners. This announcement came a week after India set a new
300 rupees (US$7) levy per ton of iron ore exported from March
1.
Although Sinosteel's management were not reachable for comment,
this is the latest reaction from China's stunned steel industry,
100 buyers from which convened on Tuesday to draft an appropriate
response to the new duties.
The common view was to appeal to the Indian government to impose
a fairer scheme before its Parliament fully approves the duties two
weeks from now, the International Financial News reported on
Thursday.
Sinosteel's move is a punishing one since it is the first to
react to the duties in a real manner despite being China's biggest
importer of Indian ore, with annual imports reaching 10 million
tons.
A report by the China International Capital Corporation Limited
(CICC) stated that Indian iron ore would lose its price
competitiveness, forcing Chinese buyers to rely more on Brazil and
Australia, which also saw a downturn in exports after levying
similar duties.
2006 saw China import 74 million tons of iron ore from India,
close to a fifth of its total imports.
The CICC report continued to say that the price hike would have
only a limited effect on China's steel industry due to a worldwide
rise in steel prices.
After rising by 9.94 percent over 2006 to 4,055 yuan (US$506.8)
per ton this February, the National Development and Reform
Commission has forewarned about further rises, likely to occur in
March.?
(Xinhua News Agency March 7, 2007)